Taxation: Cheney Family's $1.9M refund, (Shock!), RAL's

Interesting headline in the Washington Post today trumpeting President Bush's family tax bill: $187,768, on federal adjusted income of $735,180. Seems the Bush's doubled the presidential income (roughly $400K, the article reports) with interest income. More interesting than the Bush bit, though, was the shocking fact that President Cheney and his family are receiving a $1.9M refund, on roughly $8.8M of income. The family donated $6.87M to churches and charities. The article doesn't report my federal refund, which is roughly $300 this year. Celeb-reality, VH1 says. It matters more when you're famous.

I wondered what other large refunds had been reported (anybody?), but got lazy. A simple Google search turned up nothing, so instead, I landed at USA Today, which reported earlier this year that American's overpaid taxes in 2003 and 2004 by 29%, pushing annual refunds to $200B, and in essence providing a loan to the federal government worth $10B annually. "The deficit is a little smaller because of this voluntary tax," says Leonard Burman, co-director of the Tax Policy Center in Washington. True story.

USA Today ran another article on the same day by the same reporter about the tax situation, this one focusing on why American refunds are growing so large. Short story shorter, the form which establishes individual withholding rates (W-4) is too simple to easily accomplish the difficult task of determining withholding rates and the maze of tax credits. The most interesting aspect of this article was the closing paragraph. It, like the article I tabbed above, was a simple quote from Ellen Katz, editor of the Tax Savings newsletter. Same author, same topic, same source, similar quick one-liner exits. Lazy work, Dennis Cauchon, USA Today. Lazy work. (Blogging, anybody?)

Tucked within the Cauchon articles was a bit about "Refund Anticipation Loans" (RAL), which I'd never heard. I decided to learn more, which was embarrassingly easy, the Internet being what the Internet is. An RAL is a pay-day loan only with refunds. They can be viciously expensive, but tax services and loan houses make them available for people who need money yesterday. Jackson-Hewitt Tax Service, for example, treats them like a regular product. I don't look at pawn shops and pay-day loan offices any differently. Putting aside that they both make me a little itchy and uncomfortable, I don't think a well-informed person (or public) would stand for the ridiculous rates of that seedy short-term loan world.

Oddly enough, there's a pilot program in Minneapolis which is offering free RAL's to low-income individuals. As usual with public policy, there's a noble goal. Many of the complexities of our tax system are designed to benefit the poor -- like the Earned Income Credit and its tax credit brethren. However, as taxes get more complex, more low-income people need professional tax help to capitalize. Makes sense. Enter, however, the world of RALs and other fee-based tax advise, and, said Beth Haney, research director for the Childen's Defense Fund Minnesota, "Families potentially walk out of [a tax services office] in more financial trouble." So, public RALs. Of course. Ugh. The article is cached, and therefore funny looking, but it is good. Thanks, Minneapolis Star-Tribune. Thanks, Myron Medcalf.

I did taxes for a few people this tax season, and spent much of my time wondering how and why those tax houses are offering free online e-files. What is their incentive? If you've looked at a few of those services as I have, you'll be struck primarily with their extreme sketchiness. They look like old Angelfire websites, all weird colors, misshapen frames and disjointed formatting. Enter stage left the San Francisco Chronicle, and a story 18 months old. Ah, the repeated process of falling in love with the Internet. Turns out that RAL are a major incentive for these tax houses. Before RALs, however, there is the divide between federal returns (which are free), and state returns (which, in 2005, were typically fee-based). "We believe there are people who will pay $20 for the convenience of not having to input all their information again," says TaxNet founder Tom Allanson. Good gamble, I suppose. Americans often embarrass me. Eh. I'm easily embarrassed.

Skilling, Enron Settlements, Corporate Earnings Restatements

The Enron story continues to intrigue me. Beyond the implications of crime and malicious intent, I'm interested in the machinations of Corporate America, and how they played out in the unquestionably corrupt Enron Corporation. As always, I'm following the meta story pretty closely, but I'm also interested in the drama of middle management: the pressure of productivity from above and below, the secret of method, and -- even among the worst of us -- that nagging sense of wrong vs. right.

The quick status report of the Enron saga is this: Enron went bust, many of the multi-millionairres at Enron turned States Witness, and now Kenneth Lay and Jeffrey Skilling, the two heads of the company, are on trial. The government is trying to prove that Skilling and Lay masterminded the fraud. The two defendants have selected different defenses. While it seems Lay will contend he didn't know about the fraud, Skilling has continued to insist that no fraud took place because none was necessary: "Standing like a weatherman next to charts and graphs showing Enron's explosive growth in the energy markets, (Skilling) was trying to persuade the jury that pursuing a conspiracy to falsify Enron's financial performance would be nonsensical," Alexei Barrionuevo and Kurt Eichenwald reported today. Interesting (and briefly free) reading.

Since the trial began, I've been aware of Lay's intended defense: I didn't know about the fraud. He intends, apparently, to paint himself as the blissfully unaware figurehead. As chairman of the company, it seems possible. Less day-to-day. Because he was also and for long stretches the company President, it seems less plausible. Whatever. Lay's defense will play out soon enough. It was only today, though, that I realized Skilling has been arguing that Enron's fraud was unnecessary. Seems a bold defense. If true, it casts Skilling as a different sort of misfit among the brilliant criminals responsible -- rather than Lay's lazy, it's Skilling's stupid. By every assessment I've encountered, Enron's books were seriously troubled. Anyway. Skilling has argued this point pretty consistently, the NYTimes reported last week, and there have been slight variations in his story. Oops. Biggest oops? Probably Skilling's denial in December 2001 that Enron had a slush fund that they used to manipulate earnings. They clearly did.

I then bounced to a small piece that would interest lawyers and their kin. Earlier in the trial, somebody fingered Skilling as a supporter of an aspect of questionable bookmaking -- the Raptors financing vehicle. Skilling supported the questionable practice because, the witness said, it allowed Enron to "circumvent" accounting rules. On cross-examination, witness admitted he wasn't sure Skilling ever said "circumvent." Also on cross, witness admitted he had no concrete proof Skilling even supported the Raptors etc. The witness's knowledge was all second hand, he admitted, and everything was based on conversations with individuals who had pled guilty.

Perhaps the most interesting bits I read today were about the settlements and the earnings restatements. But it is all very archane, and I'm definitely done with lunch. So, in near bullet form:

Banks are being held fiscally responsible for Enron's collapse. Banks are now settling with former shareholders for pennies on the dollar. Interestingly, it might be wise to settle early. The two banks held most reponsible were the first to settle, and they paid less than a third bank, which in theory was less culpable. Also as part of this article, the law firm representing the shareholders has earned $680 million, with fewer than half of the sued banks having settled. The law firm is going to clear a billion on this. Whack.

I read another article on settlements, this one written earlier, after only two banks had settled. It confirms that early settlements are good things for the banks. They pay less.

Earnings restatements and the fudging of numbers is something that always makes me uneasy. Maybe I'm wrong to be concerned. Perhaps some of the restatements are corrections from past ill gotten gains, perhaps they are less incriminating. Interesting analysis on accounting firms. "Within the Big Four, there are some substantial variations. Ernst & Young had restatements by only 3 percent of its clients, while the figure for Deloitte & Touche was 7 percent," writes Floyd Norris. Well played, sir.

Launch Pad: Achenblach. Landing: Conservative Blogger

I was grabbed this afternoon by a Joel Achenblach bit on washingtonpost.com. I'm a little curious about the whole Katie Couric-as-CBS-anchor story. At first glance, her cheerfulness doesn't seem to jive with the often somber tone most anchors assume. But, Achenblach's headline suggested he supported her. (He does).

I quickly wandered away from the Couric bit -- analysis before she takes over seems slightly ridiculous, her performance and style will change with her job -- and instead pursued a tangent. Achenblach mentioned that he and Nick Kristof and a few other journalists won awards last night from The Week magazine. One of the other journalists was Ed Morrissy, who I'd never heard of. Off I went.

The first article of Morrissy's seemed like a joke, as it contained and then congratulated the chart I've recopied. In particular, Morrissy believes that "bypassing but informing" was evidence that the Pentagon has learned from 9/11, and that people in the Pentagon are "listening and learning." Perhaps there is brilliance in imprecision, but the thought bubbles don't seem well thought out or commendable.

Morrissy's stuff is well written, and his piece on Russ Feingold's questionable move to the fringe left was interesting, and was balanced enough. Legitimate questions can be asked. As I read more of Morrissy, I started to realize that he was a conservative blogger. I didn't know about the Iran's new stealth programs, but Morrissy mocked them. I started wondering who Morrissy was, and after reading his account of the awards banquet, I clicked on the About Me. I love About Me's, and this was a good one, too. Morrissy is from the conservative movement, and has been blogging only since 2003. He wrote about his nickname, Captain Ed, and his love of Star Trek, and a license plate ID he'd moved from car to car. Morrissy's About Me was fun stuff. I love how the Internet can humanize authors.

Finally, I tracked back to my opening tab and Achenblach, and decided to see a few of the award winning cartoons from The Week's winning cartoonist, Mike Luckovich. I don't know. Nothing jumped off the page, but I didn't take the time to delve deep. I only took a peek.

The last thing I did was to click on the "Technorati" link which I had noticed at the bottom of Morrissy's blog, and was again at the bottom of Achenblach's. Again, as I was in a hurry, I didn't figure this out properly. Anybody know anything about Technorati?

Introduction and Goals

Reading online is unlike reading anywhere else. With books, readers are forced from one page to the next, or from Chapter 1 to Chapter 3, by way of Chapter 2. With magazines and newspapers, readers are offered alternatives to what-they-are-reading-now, but the alternatives are finite. Readers can find their way back. Reading online is different. The Internet is a maze of what-not and who-thought, and years of Internet reading have taught me that if I leave one story, I'll get lost. I'll rarely return. Reading online can be a life of half-truths and quarter-stories. It can be frustrating.

A few months ago, I downloaded the new Firefox browser, and I drank the tabbed browsing Kool-Aid. I'm a devotee. It's changed the way I consume media. It's motivated me to start a blog.

I grew up reading the 1986 World Book Encyclopedia. Whenever I had difficulty finishing dinner, my mother would force me to eat until I was done. My family members would leave, and I'd sit alone -- except for the stack of encyclopedias in our dining room. Sometimes, I'd sit for hours, following a story in one encyclopedia volume to a story in second volume to a story in a third. It was interesting. I'd pick up tid-bits about all sorts of nonsense. But, because the books were physical, I could always return to my starting point.

Now, with tabbed browsing, I'm able to recreate that style of reading. I can begin with one story and -- without navigating away or losing my place -- can easily pursue tangents. I feel empowered. I feel emboldened. I feel like blogging.

Now, some of my favorite reading online is hardly reading at all. I love Howard Kurtz's blog items, and the Drudge Report, and other launching pads that send me spiraling into the Internet. Here, at Tab It Up, I'm going to chronicle some of my Internet voyages. If I read a great series of articles, and I've got a browser full of interesting tabs, I'll document that here. It is my goal to provide all the links that I followed. It'll be like peeking into my Internet library.